Shede Spirits (SH:600702) Guoxin Securities·2024-10-29 13:38Investment Rating - The investment rating for the company is "Neutral" [2][4][11]. Core Views - The company continues to face channel risks, with a significant decline in revenue and net profit in Q3 2024, showing a year-on-year decrease of 30.9% in revenue and 79.2% in net profit [2][5]. - The company plans to repurchase shares worth 100-200 million yuan for employee incentives, which is expected to boost market confidence [7][8]. - The company is focusing on optimizing its distributor structure during the downturn, with a net decrease of 46 distributors in Q3 2024 [6][7]. Financial Performance Summary - For the first three quarters of 2024, the company reported total revenue of 4.46 billion yuan, down 15.0% year-on-year, and a net profit of 669 million yuan, down 48.3% year-on-year [2][5]. - In Q3 2024, the company achieved revenue of 1.19 billion yuan, with a net profit of 78 million yuan [5][6]. - The revenue from mid-to-high-end liquor in Q3 2024 was 897 million yuan, down 35.66% year-on-year, while low-end liquor revenue was 153 million yuan, down 14.96% year-on-year [6][7]. Profitability and Cash Flow - The net profit margin in Q3 2024 decreased by 15.31 percentage points year-on-year, primarily due to product structure shifts and increased promotional expenses [7][8]. - The company's operating cash flow was negative 124 million yuan in Q3 2024, with sales cash receipts of 1.15 billion yuan, down 21.4% year-on-year [7][8]. - The company has increased its contract liabilities to 174 million yuan by the end of Q3 2024, reflecting a strategy to enhance cash flow during the off-peak season [7][8]. Earnings Forecast and Investment Advice - The company has revised its revenue forecasts for 2024 and 2025, expecting revenues of 5.64 billion yuan and 6.09 billion yuan, respectively, with a year-on-year decline of 20.3% in 2024 and a growth of 8.0% in 2025 [8][9]. - The forecast for net profit in 2024 is 1.07 billion yuan, down 39.6% year-on-year, with a recovery expected in 2025 [8][9]. - The current stock price corresponds to a PE ratio of 21.1 for 2024 and 19.3 for 2025, maintaining a "Neutral" rating due to ongoing pressures in the liquor industry [8][9].